Insurance linked securities news, ILS news

Given the softening of reinsurance rates and compression in risk spreads across catastrophe bonds and insurance-linked securities, the expected return of ILS investments is generally at a lower level, but private bank and asset manager VP Bank AG has noted that the risk premium available to investors is still attractive.

US primary property and casualty insurer The Hartford clearly sees the catastrophe bond market as a valuable source of efficient protection, that over the last few years has helped the company meaningfully raise the top of its occurrence catastrophe reinsurance tower.

SageSure, the specialist catastrophe-exposed property managing general underwriter (MGU), has sponsored its second collateralized reinsurance sidecar, securing $200 million of protection from a Seawall Re II Ltd. transaction.

The outstanding market for collateralized reinsurance sidecar structures has expanded rapidly, with estimates from rating agency AM Best valuing the space between $16 billion and $18 billion, which marks an 183% increase over the mid-point of the $5 billion to $7 billion range estimated by the agency in 2023.

As the insurance and reinsurance market responds to the growing risk capacity needs of the digital infrastructure and data centre build-out, collateralized insurance-linked securities and parametric risk transfer are playing a role in covering exposures such as correlated power grid events, according to Guy Carpenter’s Jeremy Goodman.

Allied Trust Insurance Company has returned to market for its second catastrophe bond sponsorship, seeking $100 million in fully-collateralized named storm reinsurance protection from the capital markets through a Sabine Re Ltd. (Series 2026-1) issuance, Artemis has learned.

With severe convective storms (SCS) having emerged in recent years as a significant catastrophe peril in the United States, SCS-focused cat bonds may offer a compelling opportunity for both re/insurers and insurance-linked securities (ILS) investors as the frequency and exposure of the peril continues to expand, according to Acrisure Re.

With building pressure and stresses in private credit investment markets in the headlines, the insurance-linked securities community should remember that a closely interlinked investor base means any fallout can have ramifications for the ILS asset class as well, Brad Corbett of Shuriken Capital Management told us.

Hannover Re has sponsored a second successful renewal of its landmark parametric cloud outage catastrophe bond, this time securing $35 million in retrocessional cyber reinsurance protection covering cloud outage events with a Cumulus Re (Series 2026-1) issuance, Artemis can report.

With implications of the ongoing conflict in the Middle East cascading across financial markets, investors are assessing how individual asset classes might be affected. Catastrophe bonds remain remote to such geopolitical events, but there are indirect financial market linkages investors should be aware of, according to specialist catastrophe bond fund manager Icosa Investments.